This month, I’d like to talk about the importance of choosing your power team. I have had so many enquiries in the last few weeks from clients who have had a bad experience with their existing broker or solicitor. At best, this is causing them to have to put more money into the deal, at worst it’s meant that they have lost the property, or have to start again with a new application. Most of the issues have been things that could have been prevented, which is very frustrating.

Here are my top tips for making sure you don’t make the same mistake:

1.Find a broker who’s happy to have a chat and find out the quirks of your deal.

It may be an HMO with a small communal area, low outside income, a company group structure, or a difficult property… but with most scenarios it takes more than finding out basic details and then sourcing a product from a system. I am seeing plenty of clients who are searching for the lowest cost option, without any thought over whether it will actually be able to complete! Valuation and admin fees are generally non-refundable, so make sure you don’t waste money (and time) on an application that isn’t going to go anywhere. 

A good broker should give you one quote based on what you have asked for. I am seeing plenty of emails with different lender options with no clear reason as to why you would choose one over the other. I will sometimes give options based on what valuer will be used, or valuation methodology, or perhaps a 2 or 5 year option… but not just a choice for you to decide on who you prefer! This is lazy broking! 

Your broker should challenge you on your numbers and not just take your word for it. A typical example would be your purchase price or the end GDV. We can of course never be sure, but I have seen plenty of examples recently where the GDV was never going to be achieved. The client has wasted money on architects, valuations and solicitors before they find out what a good broker should know to start with.

I’ve had one this week where the GDV was based on the aggregate value of a small block of flats. That is when you add all the individual values together, and that is only used where you have a block which is likely to be sold off as separate flats. This block has one small unit and is a converted house, so would be more likely to be sold as one block to an investor. In this instance you would take 10-15% off the aggregate value, which is a big difference! We have gone to a different lender and taken a different approach knowing this information, which really should have happened in the first place! 

2. Choose someone who can recommend solicitors and insurance brokers who are also good.

Experienced brokers have good networks, and will work with you to ensure that every part of the transaction runs smoothly. We are able to create your power team for you, so you can focus on the other areas to grow your business! 

A broker should generally complete on the terms you were given to start with. There will occasionally be issues with valuations or legals, but you shouldn’t have to go through 2 or 3 lenders on every case to find something that works. A broker who understands lender criteria will know who to go to as a first point of call, which may not be the cheapest option! You need to find someone you trust to make this work. It can be tempting to go with the cheapest option, but having someone you trust to guide you to the option which will allow you to complete quickly is far more valuable when building your portfolio. 

3. Choosing your solicitor 

Ideally you want someone you’ve worked with before, or someone your broker has. Having someone you know will be open with communicating to your team, and will use your broker to help if things don’t quite go to plan is really important – it can take weeks off the conveyancing. 

Again, it’s not about cost! Finding someone who’s good is so much more than that. Building a relationship allows you to call upon their experience, and can save valuable time and money on spotting and resolving issues.

Some lenders have specific requirements of their solicitors, or a panel to choose from so please make sure that you know you can use someone before you instruct and start ordering searches! 

I hope this is useful, and will hopefully save you some time and money and stress in the long run. If you’ve got anything specific you’d like to speak to me about then please get in touch through the HMO Roadmap here.